According to a document published on the Washington State University at Vancouver website titled "Introduction to the 4th Tech Frame: Internet Computing", disintermediation involves the removal of organizations or business process layers responsible for certain intermediary steps in a value chain. In a traditional business environment, these layers provide value added services. In an e-commerce business, they may provide little or no value and thus can be eliminated by using e-commerce. In e-commerce, business processes are automated to the point that the consumer and the producer can perform the functions that were traditionally performed by a middleman. Thus, any businesses in which the activities of a middleman can be fully automated are good candidates for disintermediation. An added benefit is that by dealing directly with consumers, producers are better able to gather information and feedback that will enable them to improve their product or service or their method of delivery (Introduction to the 4th Tech Frame: Internet Computing).
There are numerous examples of successful disintermediation. One example involves airline ticket sales. Before e-commerce and the Internet, a consumer would typically have to visit a travel agent to reserve a ticket or to review schedules and travel options. The Internet has made it possible to automate this process. As a result, the airlines are saving a significant amount of money in the form of commissions paid to travel agencies. Another example of an industry that has been successful in disintermediation is the insurance business. Applying for many types of insurance has been automated to the point that consumers can provide the insurance company with all of the information necessary for it to begin the underwriting process. As a result, the insurance company does not pay insurance agents or brokers the first year commission they would have earned for writing the
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